Formula
Net cash burned in period / Net new ARR in period
How to measure
Divide total net cash burn for the period by the net new ARR the company generated in that same period.
Why track it
A lower burn multiple indicates more efficient use of capital to generate growth, a key metric investors use to judge capital efficiency between rounds.
Example
A company burning $2 million to add $1 million in net new ARR has a burn multiple of 2.0.